Online shopping is seeing sustained demand with a focus on delivery experience, especially during the holiday season. Retailers are adapting to meet these expectations by improving their tech stacks and leveraging technology solutions like ShipStation.
In a recent interview with Retailbiz, ShipStation vice president and head of Australia and New Zealand, David Boyer discusses the predictable sales patterns around Black Friday and Cyber Monday, the impact of returns on retailers, and the influence of Amazon on consumer expectations. He also shares his advice for retailers and why it’s imperative to truly understand customer priorities, provide clear shipping and returns policies, and use technology to streamline operations.
“Overall, we’re seeing sustained demand for online shopping compared to the last two to three years, but with a higher expectation around the delivery experience, which is often exacerbated at this time of year,” Boyer said.
“This year, consumers are more price-conscious because of cost-of-living pressures. They still want to spend on non-essential discretionary items, but they expect a high level of customer service, not only when it comes to delivery, but across the entire purchase journey. I believe these expectations are being driven by improved experiences from retailers that are embracing greater access to technology solutions. From a tech stack perspective, they have their house in order and are ready to deliver on their promises.”
Predictable spending patterns
Despite the increased proliferation of Black Friday and Cyber Monday year-on-year, Boyer believes consumer spending behaviour in November and December remains relatively predictable and consistent.
“The week leading up to Black Friday (29 November this year) sees a sizeable uplift in sales. At the conclusion of Cyber Monday, sales tend to drop off quite quickly, but businesses are focused on fulfilling orders from the massive influx for the next few days. Then we see a lull up until the first cut-off delivery times which are usually around mid-December before consumers enjoy the holidays. Boxing Day tends to see another sales uplift but then return season kicks in for unwanted gifts or impulse purchases.
“We have almost a decade’s worth of Australian data and the pattern is relatively the same year-on-year, but growing as the retail segment experiences a larger uplift.”
The impact of returns
Returns are an “unfortunate non-negotiable” for both retailers and consumers, according to Boyer, but for retailers in particular, it takes a lot of operational know-how to manage returns without incurring significant costs.
“From a consumer standpoint, the expectation is for returns to be made easy, clear and convenient. However, returns have become too accessible, making them ripe for abuse. We’re seeing a trend where retailers are starting to charge for returns or create barriers to ensure returns are valid, which is responsible and reasonable from a retailer perspective.
“There’s a fine balance between consumer expectations and retailers meeting those expectations while finding a more responsible return strategy which can vary based on the products being sold.
The Amazon effect
Having moved to Australia almost seven years ago – at the same time Amazon launched in the Australian market – Boyer has personal experience of the true Amazon offering in the US, which is same-day delivery often within a two-hour window.
“It’s great to see how Amazon has evolved in Australia over the last few years into what is now a ubiquitous service across the country with an expectation that is difficult to beat with next-day delivery for all major metro areas,” he said.
“As more Australians sign up to Amazon Prime as a key value service, the challenge for retailers is how they can meet those expectations. Our research shows that delivery is the top consideration for consumers when shopping online, closely followed by reliable tracking. I strongly believe expectations are shifting as Amazon further entrenches what they’re known for – exceptional customer experience.”
Boyer believes retailers are turning to technology faster and as a first step to managing these challenges, rather than waiting until it disrupts business operations.
“We’re seeing that conversation happening earlier with businesses and solutions like ShipStation help with the delivery and shipping component. On the carrier side, we’ve seen an uplift in performance, traceability and accountability as they demand specific tracking updates and more accurate data generally,” he said.
“Businesses are realising they can use more than one carrier and segment their orders based on specialised lanes of delivery to meet consumer expectations at the time of checkout. They’re becoming increasingly savvy and we’re having to keep up with their demands.”
Be clear, concise and transparent
It’s critical for retailers to understand their customers key priorities when it comes to purchasing decisions, according to Boyer.
“For example, affordable and flexible returns. Be clear with your policies for shipping and returns – especially if it’s a self-service experience that incurs an additional cost. Ensure it’s simply stated and accessible from the onset of the checkout process,” he said.
“It’s also important to ensure product descriptions are clear, payment methods are secure and that you choose the most appropriate carrier based on the job type and shipping option selected by the customer.
“Understand your customer’s expectations and use technology to bridge the gap between offering clear expectations from the outset because they want to know what they’re getting when. Our research shows that three in four Australian shoppers won’t return to a brand after a poor delivery experience.”
What’s next for ShipStation
Boyer recently visited one of ShipStation’s customers in Melbourne which manage shipping for other brands as a 3PL business, operating out of three warehouses. The visit provided insight into busy operating environment, printing labels, managing stock, picking and packing orders.
“This moment helped validate what I know is coming from ShipStation’s parent company, Auctane because our company mission is to help make these processes robust and seamless and to save time and money,” he said.
“If you don’t have the right stock counts, it’s not only expensive but technically complex, and that’s an area we’re interested in helping retailers with – how we can solve inventory challenges, better manage the warehouse and ultimately allow businesses to pick and pack with a higher level of accuracy and fewer errors.
“It’s important for us to further extend the tools that ShipStation already offers for retailers in Australia with the logical next step being inventory and managing warehousing functions. We’re also excited to be working with our carrier partners more deeply with more details to come early in the new year.”